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Business Strategy Assessment - Essay Example
Pages 6 (1506 words)
1. The primary objective of Ryan Air was to provide cheapest airfares to the consumers and one of ways adopted by them to fulfill this objective was cost minimization. Numerous strategies and policies were devised and implemented by the company to reduce cost effectively and efficiently…
(Clark P. 2007)
b) Ryan Air decided to buy aircrafts of the model Boeing 731 only. This reduced the company's inventory volume as less stock of spare parts was required to store. The pressure on crew training was also less and the maintenance staff could easily repair the aircrafts resulting into quick service.
c) In order to reduce the landing costs, the company used airports like, Alghero (Sardinia) and Dinard (Brittany), which are not at all popular airports. These airports were looking forward to grow their business and thus offered competitive landing charges to Ryan Air.
d) The company reduced the cost of outsourcing its services to third parties like travel agents for booking their flights. This helped the company to reduce cost by 10%-15%. So far the company facilitates only its official website and its own call center service for booking of the flights.
e) Advertising is a vital part of growing business. Ryan Air reduced this cost as well by writing its low airfare captions on the aircraft body and relied more on the word-of-mouth advertising of the customers.
2. According to Michael Porter there are two basic kinds of competitive advantage- Cost advantage, where a firm delivers the same benefits as that of its competitors but at a lower cost, and differentiation advantage, where the competitive advantage of a firm lies in providing benefits that exceed those of the competitors. ...
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